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Runes will “bridge the gap” between Bitcoin and Ethereum: Franklin Templeton

This opinion suggests that runes could bridge the gap between the two largest cryptocurrencies in terms of market capitalization.

Date: 2024-04-17 Author: Łukasz Michałek
Runes will “bridge the gap” between Bitcoin and Ethereum: Franklin Templeton

Bitcoin’s soon-to-be-launched “Runes” token standard will allow the leading crypto network to catch up with DeFi rivals, asset manager Franklin Templeton predicted in a Monday report .

The company tweeted an informational brochure developing the upcoming technology, which is expected to be published at the same time as Bitcoin’s halving. “Runes introduces a new token standard for Layer 1 Bitcoin that improves on the current standards for exchangeable tokens in Bitcoin (BRC-20s),” – Franklin explained.

Tokens are blockchain-based assets that are different from the native blockchain currency, such as BTC on Bitcoin or ETH on Ethereum. Until 2023, tokens could not be minted on Bitcoin‘s main blockchain, locking it away from many applications available on other networks, including NFT, stablecoins and DeFi.

This changed in early 2023 with the advent of ordinal counts, invented by Casey Rordamor. The protocol allows users to give individual satoshi unique identification numbers and embed any data in them, enabling NFT.

Bitcoin NFTs differed from Ethereum and Solana NFTs in that their image data was embedded directly in the Bitcoin blockchain, rather than on a centralized server.

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How big can runes be?

According to Cryptoslam , as of today Bitcoin serves a larger NFT market than both blockchains. In the last 30 days, NFT transaction volume of $462 million was processed, compared to $296 million for Ethereum.

A developer named Domo later built the Ordinals protocol to enable support for BRC-20 tokens , although the developer himself admitted that such tokens were highly inefficient.

Today, Runes – once again created by Rordamor – are designed to be much more efficient and require less blockchain-based data to move than BRC-20 tokens, or even Ethereum’s ERC-20 tokens. Some of Run’s other advantages include Lightning network compatibility and enhanced transaction privacy.

Franklin wrote:

“Bitcoin is well positioned to close the gap between its volatile market capitalization and that of another blockchain.”

Bitcoin’s total market capitalization currently stands at $1.2 trillion, while the capitalization of its convertible token is just $600 million. In contrast, Ethereum’s market capitalization is $378 billion, while the market capitalization of its fungible token is $499 billion.

“We are excited to see if Runes can do for Bitcoin’s fungible token and the DeFi market what Ordinals has done for Bitcoin’s immutable token market” – concludes the report.

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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